Holiday Decorations Co. originally issued 10,000 shares of $5 par value common stock at $18 a share. The company subsequently reacquired 50% of these common shares at $22 a share. Assuming that the company uses the cost method, what accounts (and amounts) are debited if these treasury shares are retired?

1. Common stock - $25,000; APIC - $65,000; retained earnings - $20,000

2. Common stock - $90,000; retained earnings - $20,000

3. Common stock - $25,000

4. Common stock - $50,000; APIC - $130,000